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In a June 12, 2014 TOTM post, I discussed the private antitrust challenge to NCAA rules that barred NCAA member universities from compensating athletes for use of their images and names in television broadcasts and video games.

On August 8 a federal district judge held that the NCAA had violated the antitrust laws and enjoined the NCAA from enforcing those rules, effective 2016. The judge’s 99-page opinion, which discusses NCAA price-fixing agreements, is worth a read. It confronts and debunks the NCAA’s efficiency justifications for their cartel-like restrictions on athletic scholarships. If the decision withstands appeal, it will allow NCAA member schools to offer prospective football and basketball recruits trust funds that could be accessed after graduation (subject to certain limitations), granting those athletes a share of the billions of dollars in revenues they generate for NCAA member universities.

A large number of NCAA rules undoubtedly generate substantial efficiencies that benefit NCAA member institutions, college sports fans, and college athletes. But the beneficial nature of those rules does not justify separate monopsony price fixing arrangements that disadvantage athletic recruits – arrangements that cannot legitimately be tied to the NCAA’s welfare-enhancing interest in promoting intercollegiate athletics. Stay tuned.

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I’ve been in a blue funk since last Tuesday, when my home institution, the University of Missouri Law School, fell into the third tier in the U.S. News & World Report annual ranking of law schools. Since the rankings began, Missouri has pretty consistently ranked in the 50s and 60s. Last year, we fell to 93. This year, to 107. That’s pretty demoralizing.

It’s completely ridiculous, of course. On the metrics that really matter (academic reputation, student quality, bar passage, etc.), we do pretty well — near the top of tier 2 (schools 50-100). With respect to scholarly productivity, our faculty ranks sixth among law schools outside the top fifty. We do less well with employment, but that’s largely because (1) we don’t manipulate the numbers, as many schools do, and (2) many of our graduates go into prosecution and public defense, where hiring decisions are not made until after the bar examination. Where we really get beat up is on expenditures per “full-time equivalent” student. Last year, we ranked 173 out of 190 on that measure. In my view, that means we’re efficient — we get a heck of a lot out of our financial resources. According to U.S. News, though, the fact that we spend less money educating our students means that the quality of our educational offering must be sub-par. Non sequitur, anyone?

Despite the stupidity of the U.S. News rankings, they matter. We will have a harder time attracting top students next year. In the past, we’ve been able to attract sharp students that were accepted at, say, Iowa, Illinois, or Washington University because our tuition (especially in-state tuition) is much, much lower. Given all this talk of highereducation bubbles and the widespread questioning of whether law school is really worth the steep price, this should be an ideal time for Missouri to exploit its low tuition. Unfortunately, that’s tougher to do when you’ve fallen into the U.S. News third tier and prospective students, who don’t yet realize the insanity of the rankings metrics, wrongly perceive that you’re selling a shoddy product. We may also have a harder time attracting high-quality faculty, though this fall’s outstanding class of entrants (two John Roberts clerks, a Jose Cabranes clerk, and an outstanding Virginia J.D./Ph.D) will surely help on that front. We Missouri professors may even have a harder time placing our scholarship, given that the third-year law students who select articles for publication tend to evaluate scholarship, in part, on the basis of the author’s “prestige” as measured by the ranking of her home institution.

So what should we do? If I were dean, I believe I would simply opt out of U.S. News. I’m serious. We know the rankings are a joke, and they’re actually hurting us. I would simply refuse to fill out the magazine’s survey form and then take out explanatory ads, on the day the 2012 rankings were released, in the New York Times and Wall Street Journal. Reed College has taken this sort of principled stand in the U.S. News college rankings and has gotten loads of favorable media attention. I believe its stance has actually boosted its excellent reputation.

Of course, if a school fails to fill out the U.S. News form, the magazine will simply incorporate a somewhat punitive “estimate” of the uncooperative school’s data, so its ranking may be artificially depressed. But at this point, what do we at Missouri have to lose? We’re already down to 107! Anyone who does the slightest bit of investigation will see that Missouri Law — one of the oldest law schools west of the Mississippi River, the flagship public law school in a fairly populous state with two significant legal markets, the home of a productive faculty that also cares deeply about teaching — is not what participants on the Princeton Review’s old message board used to call a “Third Tier Toilet.” If we opt out of the rankings (a decision U.S. News will have to note), readers will surmise that our low ranking results from our decision not to play with U.S. News. Right now, they think there’s something wrong with Missouri, not with the screwy rankings system. Our opt-out would at least draw attention to the stupidity of the ranking metrics.

Of course, this move would entail significant risk. As it did with Reed College, U.S. News would likely adopt punitive estimates of the data we refused to provide, causing us to fall further in the rankings. Readers might not notice the disclaimer that we refused to return our survey and that our ranking is therefore based on estimated data. The media (mainstream and other) might not draw as much attention to our bold stand as I expect they would. While I think it would take a perfect storm for an opt-out strategy to tarnish our reputation even further, such storms do occasionally occur.

We could reduce the riskiness of our strategy if we could persuade some other law schools — perhaps other low-tuition, efficient schools that find themselves similarly disadvantaged by the rankings’ inapposite focus on expenditures per student — to withhold data from U.S. News. This would require U.S. News to include more “based on estimated data” asterisks, which would reveal the punitive nature of the magazine’s estimates and undermine confidence in the flawed ranking system.

But would this sort of concerted strategy run afoul of the antitrust laws? Initially, I thought it might. After all, what I’m contemplating is essentially an agreement among competitors to withhold information from a publication that tends to enhance competition among those very rivals. Moreover, the cooperating rivals would be withholding this information precisely because they think the competition stimulated by the publication is, to use the old fashioned term, “ruinous.” It smells pretty fishy.

The more I think about it, though, the less troubling I find this strategy. The fact is, the methodology underlying the U.S. News rankings is so unsound that the rankings themselves are misleading. And the misrepresentations they convey actually hurt a number of schools like Missouri. I believe we who are unfairly disadvantaged by the U.S. News methodology could, without impunity, bind together in an attempt to undermine the flawed rankings. Indeed, it is in our individualcompetitiveinterests to do so.

So how would a court evaluate a boycott of U.S. News by a group of law schools that perceive themselves to be disadvantaged by the magazine’s ranking methodology (say, less expensive, more efficient law schools with low per-student expenditures)?

First, the court would likely determine that the agreement not to participate in the ranking survey is ancillary, not naked. As Herb Hovenkamp has explained, “[a] serviceable definition of a naked restraint is one whose profitability depends on the exercise of market power” (i.e., on a constriction of output aimed at artificially raising prices so as to enhance profits). The agreement I’m contemplating makes perfect business sense apart from any exercise of market power. Each law school that would participate in the agreement is personally injured by the screwy rankings scheme, and each has an independent incentive — regardless of what other schools do — to refrain from participation. The participating law schools, it is true, would prefer to have others join them, but that is not because they are seeking to exercise market power; rather, they realize that the message their non-participation will convey (i.e., that U.S. News’s rankings methodology is nonsense) will be stronger if more schools join the boycott.

Since the restraint I contemplate is ancillary, not naked, it would be evaluated under the rule of reason. Indeed, any court that sought to utilize a less probing analysis (per se or quick look) would have to confront the Supreme Court’s California Dental decision, which held that a pretty doggone naked restraint among competing dentists was entitled to a full rule of reason analysis because it could enhance competition by reducing fraudulent advertising.

Under the rule of reason, the arrangement I’m contemplating would likely pass muster. Because widespread misinformation among consumers reduces the competitiveness of a market, an effort to reduce such misinformation, even a concerted effort, is pro-, not anti-, competitive. Because the “agreement” aspect of my contemplated restraint increases the degree to which the arrangement undermines the misleading, competition-impairing U.S. News rankings, it enhances the restraint’s procompetitive effect.

So what do others think? Am I underestimating the antitrust risk of this strategy? The business risk? My TOTM colleagues from Illinois and George Mason, both of which do quite well under the U.S. News formula, probably have little personal interest in these musings. But I suspect others do. What do you think?

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In Law & Economics in Japan, Harvard’s Mark Ramseyer tries to explain why Japanese scholars have mostly not embraced law and economics to the extent of their peers elsewhere. He tries on some explanations — “the location of legal education in the undergraduate curriculum, and the long-term Marxist domination of economics faculties” — but is ultimately unsatisfied with these explanations. Here’s why:

The reason for the explanatory difficulty lies in the absence of a profits constraint at the modern university. For-profit firms adopt efficient technologies or die. By contrast, university departments with preposterous theories can survive for decades (witness literature departments in the U.S.). Universities do compete, whether in the U.S. or Japan. But they do not compete with anything approaching the intensity of ordinary economic markets. Spared that intensity, they need not converge on superior scholarly technology. In some departments in some universities in some countries, scholars will adopt the better technology. Elsewhere, they will thrive for decades without it.

In other words, how can we really explain what does and doesn’t work in academia when schools and scholars everywhere lack the profit motive to compete?

As with many things, Henry Manne noted this long ago. As I summarized his views (published in Henry Manne: Intellectual Entrepreneur, in Pioneers Of Law And Economics (Lloyd R. Cohen and Joshua D. Wright, eds.,. Elgar Publishing, 2009):

Manne (1993) pointed out that universities are run as non-profit institutions under a board of trustees, a system in which nobody has a property right in the institution’s success. Power therefore has devolved to university faculties. This is complicated in the case of law schools by the lawyer cartel’s significant control over legal education. In other words, unlike the corporations that Manne studied, universities and law schools are not basically market institutions. Thus, even if the market demanded specialization and product differentiation, it is not clear that the governing bodies of universities would respond to this demand. Instead, schools could be expected to continue to make things comfortable for their tenured faculties. There is no market for control to deal with recalcitrant university administrators.

Manne notes that the lawyer cartel (aka licensing and accreditation laws) is at least partly responsible for the lack of competition in legal education. I emphasize that in a forthcoming and soon-to-be posted paper. Elimination of the accreditation constraint could take care of both problems by enabling for-profit law schools.

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David Leonhart points out the new Dale & Krueger study on the value of an elite undergraduate education. His punchline:

A decade ago, two economists — Stacy Dale and Alan Krueger — published a research paper arguing that elite colleges did not seem to give most graduates an earnings boost. As you might expect, the paper received a ton of attention. Ms. Dale and Mr. Krueger have just finished a new version of the study — with vastly more and better data, covering people into their 40s and 50s, as well as looking at a set of more recent college graduates — and the new version comes to the same conclusion.

Indeed, check out the Dale & Krueger abstract:

When we adjust for unobserved student ability by controlling for the average SAT score of the colleges that students applied to, our estimates of the return to college selectivity fall substantially and are generally indistinguishable from zero. There were notable exceptions for certain subgroups, [namley] for black and Hispanic students and for students who come from less-educated families.

So — college prestige doesn’t matter much. Right? Not so fast my friend…

The devil is in the details. Or in this case, the regression tables. And the real story is that college prestige matters quite a bit for men, but not women. Robin Hanson is on the case (the study itself is in italics):

To find the truth, you have to study Table 4 carefully, and note footnote 13:

For both men and women, the coefficient was zero (and sometimes even negative) [in] the self-revelation model.13 …

[footnote:] 13 This lower return to college selectivity for women is consistent with other literature. Results from Hoekstra (2009), Black and Smith (2004) and Long (2008) all suggest that the effect of college selectivity on earnings is lower for women than for men.

Table 4 shows that attending a college with higher SAT scores clearly lowered the wages of women 17-26 years after starting college (in 1976) — a school with a 100-point higher average SAT score reduced earnings by about 6-7%! The two estimates there are significant at ~0.01% level! (The other three, for other periods after starting college, are significant at the 5% level.)

One obvious explanation is that women at more elite colleges married richer classmate men, and so felt less need to earn money themselves. Why don’t the study’s authors want us to hear about that?

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I find it interesting that many on the left, so intent on maintaining their anti-market narratives, distort reality so badly that black is white and up is down–and “government” is “corporations.”

I’ve highlighted this before when discussing the misdirected criticisms (and solutions) of self-described privacy advocates who point the finger at Google when really they should be concerned about the government.

Now comes Brian Leiter referring us to an article on “Corporate Attacks on Law School Clinics.” That’s the title of his post which contains nothing more than a heated admonition to read a linked article, so the title says it all: Corporations are attacking law school clinics (and this is a huge problem that should concern everyone). And I have no doubt many corporations are upset with many law school clinics. But what’s so fascinating is how, when you click through to the article, you discover that the actual attacks on law school clinics are, in every single example adduced in the story, actually emanating from governments. It’s pretty amazing. Here are the relevant snippets from each example in the article, but I recommend reading the whole thing:

In spring 2010, a law-clinic lawsuit against a $4 billion poultry company triggered a legislative effort to withhold state funds from the University of Maryland unless its law school provided the legislature with sensitive information about clinic clients and case activities.

The attack plan included the introduction of legislation that would forfeit all state funding if a university offered certain types of law-clinic courses.

The first occurred in 1968 at the University of Mississippi, where the appointments of two untenured professors were terminated following complaints that their new clinical program participated in a desegregation lawsuit.

In efforts to terminate the program, clinic opponents sponsored a bill in the legislature to withdraw state funding for the entire law school.

In 1993, then-governor Edwin Edwards was so upset at statements the clinic’s director made that the governor threatened to deny financial assistance to state residents attending the university and to prohibit Tulane medical students from working in any state hospital unless the director was fired.

A few years later, the clinic’s success in representing a low-income, minority community opposed to a proposed chemical plant led then-governor Mike Foster and business interests to threaten to revoke Tulane’s tax-exempt status and deny it access to state education trust-fund money, to organize an economic boycott of Tulane, and to refuse to hire its graduates.

When the university still refused to terminate the course, clinic opponents successfully persuaded the Louisiana Supreme Court to impose restrictions on whom law school clinics can assist and what kinds of representation students can provide.

When state legislators expressed disapproval of a law school clinic’s representation of citizens concerned about a proposed highway, university officials began charging the clinic for the university’s overhead costs, prevented it from approaching funders unless it agreed to avoid certain cases that might upset legislators, and pressed it to separate from the school and move off campus.

The clinical program at Rutgers University is defending itself against a lawsuit brought by a developer, who was defeated in a clinic case and is now seeking to use the state’s public records law to gain access to internal clinic case files that would otherwise be beyond the reach of a party to a lawsuit

A dispute in Michigan this past winter demonstrates that attacks also can occur when students get in the way of powerful government interests. The district attorney in Detroit, upset with the efforts of a University of Michigan innocence clinic to exonerate a man it alleged was wrongfully imprisoned for ten years, sought to force the students to testify at trial against their client, an unprecedented effort to interfere in the students’ attorneyclient relationship.

Perdue persuaded legislators to attach a rider to the university’s appropriations that conditioned $750,000 in funding on submission of a report detailing clinic cases, clients, expenditures, and funding, much of which is confidential information.

An even harsher attack occurred in Louisiana this past spring, where the Louisiana Chemical Association (LCA) pushed for legislation, subject to narrow exceptions, that would forfeit all state funds going to any university, public or private, whose clinics brought or defended a lawsuit against a government agency, represented anyone seeking monetary damages, or raised state constitutional claims. The bill also would have made clinic courses at the state’s four law schools subject to oversight by legislative commerce committees.

This isn’t cherry-picking. Unless I made a mistake, this is every single example of “attacks on law school clinics” in the article. And every single one involves government actions or the threat of government actions. Wow. How on earth could anyone read this article and feel comfortable calling this a problem of corporations? Don’t get me wrong–I understand that there are often corporate interests behind these actions, spurring them on. But to call this a “corporate” problem rather than a “government” problem–with the implicit call for government to do something about the problem–is to fail so utterly to understand the problems of government power that it boggles the mind.

Like Brian Leiter, I find this list troubling. I am appalled at how much inappropriate government interference this represents. But it is simply delusional to call this a problem of corporations. You want to fix the problem? Rein in the ability of governments to interfere to thoroughly with private life that special interests don’t have access to such a powerful and, often, invincible bludgeon.

All the rage around the law blogs this week is the question of whether law schools should be engaging in grade inflation. The issue arises from time to time. The NYT kicked off the discussion most recently with its story on the (gasp) retroactively applied bump given to Loyola LA law students. You can’t miss the discussion on the law blogs (here, here, here and here). The question of whether grade inflation helps or hurts students on the job market depends on how employers adjust to different curves between schools in their hiring practices as well as how they adjust to changes in the curve at a particular school. One plausible hypothesis is that both differences between curves and changes within a law school don’t impact hiring decisions because legal employers adjust to the changes by relying on alternative measures like class rank or updating their priors on what a particular GPA means from a particular school in terms of the quality of the candidate. Call this the irrelevance hypothesis.

The conventional wisdom seems to be that the irrelevance hypothesis doesn’t hold. Let the anecdote stacking begin! The NYT story itself notes that “in the last two years, at least 10 law schools have deliberately changed their grading systems to make them more lenient … to rescue their students from the tough economic climate.” This view appears to agree with the intuition of many a law blogger. Over at the Conglomerate, Christine Hurt suggests that small and out-of-town firms may not know about the variance in grade distributions across schools and individual schools have the incentive to inflate. Howard Wasserman notes that:

The problem is an (anecdotal) strong resistance in the legal market to do so. Part of the push to change here came because our dean’s conversations with people in the hiring market convinced him that GPA was the be-all-end-all and class rank did not matter. As a relatively new, lower-tiered school, firms are interested only in our very top students. But many firms seemed to say that a 3.3 GPA was not high enough for them to look at, even if that person was # 3 in the class.

There is a battle of intuitions and priors about the legal market going on here without much evidence. One underlying assumption about legal employers, or some set of legal employers, is that firms are either not paying attention or are irrationally committed to metrics like GPA when more informative measures like class rank are available. And of course, the fact that 10-12 schools have engaged in this experiment presumably with some educated guess as to the reaction of employers certainly contains valuable information. As an interesting side note, the Loyola LA Dean announcement discussing the change goes the other direction, noting that the fact that employers pay “very close attention” to these numbers is a reason for the change! Of course, even if the irrelevance hypothesis passes muster, it does not strictly follow that moving the mean GPA upward is a bad thing for reasons unrelated to job outcomes.

But lets get back to the basics: invariably, the cost/benefit analysis for grade inflation comes down to whether these changes are having an impact on the job market. Are employers adjusting? Is there a difference in the reaction time of out of town and local firms? Does the adjustment have a short-term effect while employers figure it out and then things return to normal? Do schools that inflate multiple times pay a reputational penalty on the job market as employers get frustrated with the gamesmanship? Does a student who finishes with the same class rank but higher GPA than a student at a similarly ranked law school better off in some meaningful way? Do students at the top of the class suffer from these experiments in inflation as it makes it more difficult for them to stand out from their peers on GPA terms?

The NYT story reports that at least 10 schools have made these changes over the last decade. One source reports the number is closer to 12. These changes seem like excellent opportunities for empirical testing of some of the underlying assumptions floating around out there both about consumers and producers in the legal education market. The anecdotes have some limited usefulness here and all, but the same anecdotes have been around for quite some time, and perhaps there an opportunity to move beyond anecdote and toward empirical analysis here? Interest in the reform of legal education and outcomes seems to be on the rise in academic circles, though this is not an area I’m too familiar with.

Do we have data that can help us answer these questions? What’s the evidence?

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Tom Smith offers an entertaining and insightful perspective on the economics of higher education:

Without passing moral judgment in any way, I will just observe it is astonishing that higher education in this country has managed to get established a system where consumers have to disclose in detail how much money they have before they are told what they must pay. I mean Ralph’s has to establish a Price Club and airlines First Class and Coach and so on, but Yale and the University of the Ozarks just have you tell them in detail every last thing about your finances and precisely how desirable your offspring is. Amazing. And then they squeeze really, really hard. The producer surplus they are extracting must be simply massive. Of course, I am paid out of this surplus, so I can’t complain too much. But it has got to be just hugely inefficient. And, just to make it perfect, it all gets justified as redistribution to help that most worthy of souls, the very smart but very poor kid from Hellovanotion, Nevada, who works 40 hours a week delousing donkeys and caring for his quadriplegic mother, while still getting 1600 SATs, a 4.6 and captaining his/her wind ensemble to international glory. And is President of Key Club. And yet, how much of the surplus extracted actually goes to put the poor, deserving kid through Duke? I tend to think, probably not that much, percentage-wise. Maybe about as much as my income taxes go to support the hard working but poor single mom who just needs a little help so she can get that community college degree and never be on welfare again. So big emotional but relatively small statistical impact. Just expressin’ a natural curiosity here. Anyway, check out the book.

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I’m delighted to report that the Liberty Fund has produced a three-volume collection of my dad’s oeuvre. Fred McChesney edits, Jon Macey writes a new biography and Henry Butler, Steve Bainbridge and Jon Macey write introductions. The collection can be ordered here.

Here’s the description:

As the founder of the Center for Law and Economics at George Mason University and dean emeritus of the George Mason School of Law, Henry G. Manne is one of the founding scholars of law and economics as a discipline. This three-volume collection includes articles, reviews, and books from more than four decades, featuring Wall Street in Transition, which redefined the commonly held view of the corporate firm.

Volume 1, The Economics of Corporations and Corporate Law, includes Manne’s seminal writings on corporate law and his landmark blend of economics and law that is today accepted as a standard discipline, showing how Manne developed a comprehensive theory of the modern corporation that has provided a framework for legal, economic, and financial analysis of the corporate firm.

Volume 2, Insider Trading, uses Manne’s ground-breaking Insider Trading and the Stock Market as a framework for many of Manne’s innovative contributions to the field, as well as a fresh context for understanding the complex world of corporate law and securities regulation.

Volume 3, Liberty and Freedom in the Economic Ordering of Society, includes selections exploring Manne’s thoughts on corporate social responsibility, on the regulation of capital markets and securities offerings, especially as examined in Wall Street in Transition, on the role of the modern university, and on the relationship among law, regulation, and the free market.

Manne’s most auspicious work in corporate law began with the two pieces from the Columbia Law Review that appear in volume 1, says general editor Fred S. McChesney. Editor Henry Butler adds: “Henry Manne was an innovator challenging the very foundations of the current learning.” “The ‘Higher Criticism’ of the Modern Corporation” was Manne’s first attempt at refuting the all too common notion that corporations were merely devices that allowed managers to plunder shareholders. Manne saw that such a view of corporations was inconsistent with the basic economic assumption that individuals either understand or soon will understand the costs and benefits of their own situations and that they respond according to rational self-interest.

My dad tells me the sample copies have arrived at his house, and I expect my review copy any day now. But I can already tell you that the content is excellent. Now-under-cited-but-essential-nonetheless corporate law classics like Some Theoretical Aspects of Share Voting and Our Two Corporation Systems: Law and Economics (two of his best, IMHO) should get some new life. Among his non-corporations works, the classic and funParable of the Parking Lots(showing a humorous side of Henry that unfortunately rarely comes through in the innumerable joke emails he passes along to those of us lucky enough to be on “the list”) and the truly-excellent The Political Economy of Modern Universities (an updating of which forms a large part of a long-unfinished manuscript by my dad and me) are standouts. And the content in the third volume from Wall Street in Transition has particular relevance today, and we would all do well to re-learn the lessons of those important contributions.

The full table of contents is below the fold. Get it while it’s hot! Continue Reading…

Tyler comments (among a series of comments in an ongoing Crooked Timber symposium 0n the book) on the section of the book on law and economics. It’s about a third of the book (and of course it’s the most interesting third!), but over at Crooked Timber, as near as I can tell, they have no one who actually, you know, does law and economics to comment on the book, and only Tyler who comes close.

Tyler is a great blogger, a great economist, and a great eater, among other things. On this, however, Tyler doesn’t do a very good job.

Here’s the key part (for me) of his post:

I view the relatively conservative nature of the law and economics movement as a historical accident which is already more or less obsolete. For better or worse, the wave of the future is scholars such as Cass Sunstein, not Henry Manne. The simple lesson is simply that in the long run “mainstream” usually wins out, even if the efforts of Henry Manne shifted or accelerated what later became mainstream trends.

One topic which interests me is how the “conservative” law and economics movement, as it is found in legal academia, differs from “market-oriented” economics, as it is found in the economics profession. The “right wing” economist and legal scholar will agree on many issues but you also will find fundamental variations in their temperament and political stances.

Market-oriented economists tend to be libertarian and it is rare that they have much respect for the U.S. Constitution beyond the pragmatic level. The common view is that while a constitution may be better than the alternatives, it is political incentives which really matter. James M. Buchanan’s program for a “constitutional economics” never quite took off and insofar as it did it has led to the analytic deconstruction of constitutions rather than their glorification. It isn’t hard to find libertarian economists who take “reductionist” views of constitutions and trumpet them loudly.

The conservative wing of the law and economics movement, in contrast, often canonizes constitutions. Many law and economics scholars build their reputations from studying, interpreting, or defending the U.S. Constitution. You don’t get to higher political or judicial office by treating a constitution in purely economic terms.

What I don’t understand is who these “conservative” law and economics scholars are. OK, I know a couple. But if the relevant distinction for Tyler is between “conservative” and “market-oriented,” I’d hold the law and economics stalwarts up to Tyler’s favored economists any day. In what fashion are the following people”conservative” and not “market-oriented”? Henry Manne, Paul Mahoney, Dick Posner (in the old days), Frank Easterbrook, Dan Fischel, Josh Wright, Ed Kitch, Bill Landes, Henry Butler, Richard Epstein, George Priest, Alan Schwartz, Roberta Romano, etc., etc.

Moreover, among these–just the first few who popped into my head–I’d say only one is known for any really significant constitutional analysis–and it’s hardly reverence, at that. To be sure, these folks are trained in the law, and take institutions seriously. The Constitution is a pretty important part of the institutional landscape in the US. Taking it seriously is a part of taking the law seriously. Fetishizing it–that’s different. But I know very few law and economics scholars who fetishize the Constitution. Liberal legal scholars–even some liberal economists? Absolutely. Law and economics scholars? Not so much. So–who are the law and economics scholars who built “their reputations from . . .defending the U.S. Constitution?”

Finally, Tyler claims that the students at GMU Law are just like law students everywhere–with no greater an appreciation for the Coase Theorem or moral hazard than law students anywhere else. If that is true–and it may well be true; certainly GMU Law seems to be losing its clear focus on law and economics–it is a change from the days when my dad was dean. The goal (and as far as I know it was achieved) was that the students at GMU would have a very different experience and training than law students elsewhere, with the possible exception of Chicago. If Tyler’s students don’t reflect this, I’d say things have changed. Or else it’s self-selection–a concept that any self-respecting George Mason Law student would well understand.

For those who haven’t, Cousins is a blue chip high school basketball recruit who has been bargaining hard with the University of Alabama-Birmingham (UAB) over signing his National Letter of Intent — the letter that commits a player to attend the university and imposes the penalty of giving up a full year of eligibility if the student-athlete transfers. Cousins wants to commit to UAB to play for former Indiana University coach Mike Davis but wanted to seek contractual insurance for the possibility that after signing the letter of intent and making specific investments to UAB, Davis might leave the program. Cousins alleged that Davis promised that UAB would release Cousins without penalty if Davis was no longer his coach.

When we last left Cousins, he was holding out, talking to other programs, and attempting to bargain for this term in his National Letter of Intent. He’s now signed with Memphis.

Back then, I noted that I thought it was odd that UAB could not find a way to include the contractual provision in Cousins’ NLI and wondered whether other athletes were successful in doing so. It turns out recent developments give answer to that question, and also involve Cousins.

As the college basketball world now knows, former Memphis coach John Calipari (who successfully got the verbal commitment from Cousins) has accepted the head coaching position at the University of Kentucky.

With Calipari accepting the Memphis job, the question now turns to whether his excellent recruiting class will stay at Memphis. But what about the NLI provisions that commit a player to attend or take the one year penalty for transferring? Apparently, Cousins only committed to Memphis verbally and so is free to transfer. ESPN reports that Cousins may stay at Memphis but that Calipari is likely to have a wonderful shot at him heading to Kentucky.

But here is the interesting new fact (at least to me and as it has been reported on ESPN): Another blue chip recruit that had signed an NLI with Memphis, Xavier Henry, but ESPN reporters continue to reference his NLI including a provision that allows him release without penalty in the case of Coach Calipari leaving. My immediate reaction is that the fact that the competitive process for top recruits allows those players to extract these sorts of commitments from programs like Memphis convinces me that the problem at UAB must be related to a dispute between their coach (Mike Davis) and the UAB administration. Of course the coach wants the provision. But perhaps administrations at mid-majors want to increase the cost of early departures by prohibiting coaches from leaving and keeping recruits at the new school whereas this is less of a problem at major programs that have other substitute methods of keeping their coaches on staff for long periods of time. For example, this list of terms reported to be included in Calipari’s Kentucky deal are too good not to post:

The $31.65 million deal making John Calipari the highest-paid coach in college basketball is packed with perks beyond his annual salary, including membership to the country club of his choice, two cars and incentives for reaching the NCAA Sweet Sixteen and Final Four and winning a national title.

The Wildcats paid Memphis $200,000 as part of Calipari’s buyout of his Tigers’ contract, which had paid him $2.35 million per year.

Including $3 million in retention bonuses he’ll get for staying with Kentucky through March 31, 2016, Calipari is in line to receive an average of $4 million a year over the eight years.

Two “late model, quality automobiles,” plus mileage.

Membership in a country club of his choice, including monthly dues and initiation fees.

20 prime “lower-level” season tickets to UK home games.

Eight tickets for each UK home football game.

Hundreds of thousands of dollars in incentives for reaching certain milestones, such as a 75 percent graduation rate or better ($50,000), winning the Southeastern Conference ($50,000), winning the SEC tournament ($50,000), making the NCAA tournament round of 16 ($100,000), making the Final Four ($175,000), or winning the national title ($375,000).

The right to income from conducting basketball camps using UK facilities.

Should the university fire Calipari without cause, he would still receive $3 million for each year left on the contract, double the annual buyout former Kentucky coach Billy Gillispie says he is entitled to under his memorandum of understanding.